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About this blog: The Raucous Caucus shares the southpaw perspectives of this Boomer on the state of the nation, the world, and, sometimes, other stuff. I enjoy crafting it to keep current, and occasionally to rant on some issue I care about deeply... (More)

About this blog: The Raucous Caucus shares the southpaw perspectives of this Boomer on the state of the nation, the world, and, sometimes, other stuff. I enjoy crafting it to keep current, and occasionally to rant on some issue I care about deeply. My long, strange career trip has included law and management jobs in two Fortune 50 companies, before founding the legal search and staffing firm Cushing Group, Recruiters. I've lectured on negotiation and settlement strategy, and teach graduate courses at Golden Gate University (Adjunct of the Year for a doctoral seminar on business, law and society). Illinois, Texas and California (Inactive) admitted me to law practice; I hold JD and MBA degrees from the University of Illinois, and a BGS from the University of Michigan, with Distinction. There -- Go Blue! Personally, my daughters are a lawyer in NY, and a pre-med student in NM - their lives-and-times often animate these columns. I'm active in animal advocacy matters, having led a citizen team that took Alameda's city animal shelter to a non-profit operation - we saved $600K annually and the lives of some 700 companion animals/year vs. the City's best alternative. I'm delighted with that success. My family has re-homed 144 foster animals over many years; we host four boisterous border collies of our own. Mostly for humane movement efforts, I was nominated for GQ magazine's 2009 Better Men, Better World Award. You may notice that many of my rants relate to critter issues. In addition to the Raucous Caucus blog, I frequently contribute to The BARK magazine, and am a proud Moderator emeritus on the popular news and humor website www.Fark.com. I prefer scotch over imported beer (Hide)

Food Stamps Food Fight

Uploaded: Dec 14, 2012

As I wandered the web a few days ago, this dust-up between CNN correspondent Soledad O'Brien and Senator Jeff Sessions caught my ear: http://cnnpressroom.blogs.cnn.com/2012/12/11/sen-sessions-food-stamp-program-is-growing-out-of-control-voted-for-increases-in-2002-2008/ . I'll admit that my preconceptions include the suspicion that the Senator's heart could cut glass. That said, the issue did arise repeatedly in the Presidential campaign, and Mr. Sessions seemed to be making serious claims about both the remarkable growth of the program and its potential for fraud  items not fully addressed by Ms. O'Brien's inquiries and rejoinders. If, indeed, 1-in-6 Americans receives this form of assistance, then like the Pentagon in last week's epistle, it ought to occupy our budgetary attentions. The results of some digging follow, below.

The first revelation to my sheltered existence was that these are not stamps at all, but the pre-loaded "EBT" cards that are a grocery store payment option. Also, the program is now referred-to as SNAP ("supplemental nutrition assistance program"). It is the product of an uneasy mixed marriage between rural agricultural and so-called urban poverty interests, first conceived in the latter 1930s as a win/win way to help draw down food surpluses and relieve victims of the ongoing Great Depression. As such an offspring, it has suffered an ongoing identity crisis  is the program intended to be a transitory hand, or a more permanent assist to the working poor? That first iteration was the former, and it was ended in the full-employment era of the 1940s. When it resurfaced as an element of the Great Society in the 1960s, and through several program permutations since then, it has tended to be more like the latter  offering long term help to job holders on the low-end of the pay spectrum.

To be eligible, a family must make no more than 130% of the current poverty rate, or about $24,000/year for a family threesome. There has traditionally also been a work criterion, requiring that able-bodied adults in the household be employed, at least 30 hours/week. Its restriction to use only for food purchases allays concerns that direct monetary aid might otherwise be squandered on riotous living.

The Bush2 Administration broadened eligibility and benefits (for which Senator Sessions voted, before deficit hawklyness was in vogue). Program costs doubled during his terms, rising from $19 billion to $39 Billion/year by 2008. During the first Obama term, it has more than doubled again, with 2012 costs estimated at $85 Billion. Even so, it is hardly the stuff of sumptuous dining, with the average subsidy/meal being about $1.50. 80% of benefits are used in the first half of each month.

So, the 4X growth comment passes muster -- where'd all that new growth come from? Two sources, apparently  one of them obvious, and the other a bit more subtle. First and likely foremost, the rise in recipients has closely tracked the unemployment rate, especially after the "work" rules restrictions were relaxed to accommodate jobless folks -- at least while local unemployment rates exceed 10% (thus the return of the transitory help model, grafted onto the basic program). Second, the program has traditionally been under-subscribed by about half, as qualified individuals have not signed-up. That rate has fallen to around 28% through recruitment efforts, greater need and perhaps less of a stigma attaching to the program during hard times. That means that costs should fall as the economy improves, but there's always the danger that the program's expense will "defy gravity," as some government programs tend to do.

Now, what about all that WFA (waste/fraud/abuse)? According to the USDA and administering states, both trafficking (selling the cards for cash) and ineligibility fraud are relatively rare. Trafficking is said to be at less than 3% and falling, with strong enforcement deterrence. Those states also conducted more than 800,000 eligibility audits in 2011, resulting in about 40,000 expulsions from the roll. That's a fair sampling for an ongoing audit program, and even if we assume a random selection of those investigated (one would hope for better targeting), that's less than a 5% mistake-And-fraud rate. Audit is a necessary program element, especially as/whenever the economy improves, but not a big source of current potential savings.

In sum, it turns out that Senator Sessions' concern about SNAP is founded much deeper than the current budget imbroglio. It goes to that identity issue, and whether long term assistance to the working poor is a good policy idea. He has spoken repeatedly about the "moral" problem of creating a permanently dependent underclass; he'd prefer a system of private charity ("Thank you, sir  may I have another?"). He is counter-balanced by those who find food to be the very most basic form of relief, and a greater moral problem in denying bread to the mouths of children. Non-profits in the field are certainly overwhelmed, already.

My own SNAP judgment is that Food Stamps is a pretty well-run program of well-targeted assistance  it's doing what is appropriate and intended, and its cost will likely recede as times improve. SNAP does not deserve much of a role in the budget negotiations, and it is very far from the worst place my tax dollars flow.

Posted by Frank Taxpayer,
a resident of Walnut Creek,
on Dec 18, 2012 at 8:21 pm

The fraud is rampant.. Ask store clerks what they see every day. Where MY Obamaphone? Removing the work requirement by the current prez was just a way to push entitlement voters. My cousin teaches illegals -yes they brag about it-who get food cards too. If you have 7 kids by as many "dads" but couldn't feed one-that's child abuse. You birth it-you feed it. Where dat Obamaphone again? Some ppl ARE deserving of assistance- but for MANY- this is a way of life.

Posted by Tom Cushing,
a resident of Alamo,
on Dec 19, 2012 at 7:08 am

Sam and Frank: Thanks for commenting. With private options already overwhelmed, it's hard to see how they could pick-up more than a small fraction of this many multi-$Billion load.

@ Frank: you know that scene in the Ocean's Eleven remake, when Danny Ocean tells casino owner Terry Benedict that he can find out who took the casino's money, because he "knows a guy?"

And Benedict replies: "You know a guy…"

Well, that's how I feel about your comment. You state that fraud is rampant, and your sources are … a store clerk and your cousin? You know two guys? Got any other sources?

People being people, there will be attempts at fraud -- hence all those eligibility audits, and stiff store penalties, when they get caught. And coded cards means better purchase records and trace-ability than with generic stamps. A 'rampant' claim based on anecdotal evidence sounds a lot like an excuse to inhabit an alternate reality.

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